An erosion of their wealth may not be the only piece of bad news for those who hold Punjab National Bank’s (PNB) stock. The 125-percent fall in its price since January has resulted in the bank’s market capitalisation falling to less than that of its subsidiary PNB Housing Finance.
According to data available with BSE, PNBs market caphas fallento Rs 20,925.15 crore, less than PNB Housing Finances Rs 21,322.92 crore. PNB Housing Finance’s stock is currently trading around 5 percent lower than the price at which it started the calendar year.
PNBhas been at the centre of a Rs 14,000-crore bank fraud involving businessmen Nirav Modi and Mehul Choksi. Poor financial performance on the back of rising non-performing assets (NPAs), and a surge in provisions have also weighed on sentiment.
The bank recently reported a net loss of Rs 13,416.91 crore for the quarter ended March, the highest quarterly loss ever posted by any Indian bank. The bottom line was dragged down by a threefold surge in provisions towards bad loans, because the bank chose to provide for most of its bad loans in the March quarter itself.
related news RCom jumps 8% as firm mulls moving NCLAT against NCLT order based on Ericsson plea Divis Laboratories gains 4% after USFDA inspection with no observations The total hit to PNB on account of the Nirav Modi-scamstands at Rs 14,356.84 crore, including unauthorised letters of undertaking and domestic loans. Due to high provisions, the bank’s capital adequacy ratio (CAR) dipped to 9.2 percent, which is less than the 11.5 percent prescribed by the Basel-III norms.